Hindustan Petroleum Corporation Ltd.
|BSE: 500104||Sector: Oil & Gas|
|NSE: HINDPETRO||ISIN Code: INE094A01015|
|BSE LIVE 15:40 | 11 Dec||431.90||
|NSE 15:54 | 11 Dec||432.55||
|Mkt Cap.(Rs cr)||65,814|
|Mkt Cap.(Rs cr)||65813.78|
Hindustan Petroleum Corporation Ltd. (HINDPETRO) - Director Report
Company director report
On behalf of the Board of Directors it gives me immense pleasure in presenting to youthe sixty-fourth Annual Report on the Performance of the Corporation together with theAudited Financial Statements for the financial year ended March 312016.
(Rs. in Crores)
SALES/INCOME FROM OPERATIONS
Your Corporation has achieved Sales/Income from operations of ' 197744.28 crores in2015-16 as compared to ' 217061.11 crores in 2014-15 on standalone basis.
Your Corporation has earned Gross Profit of ' 9044.98 crores in 2015-16 as against '6831.86 crores in 2014-15 and profit after tax of ' 3862.74 crores in 2015-16 ascompared to ' 2733.26 crores in 2014-15 on standalone basis.
The Board in its meeting held on February 01 2016 declared an interim dividend of '11.50 per share. Further the Board in its meeting held on March 112016 declared secondInterim Dividend of ' 7.00 per share. The total interim dividend declared is ' 18.50 PerShare.
The Board of Directors after taking into account the Financial Results of theCorporation during the year have recommended a final dividend of ' 16.00 per share. Thetotal dividend for the year 2015-16 works out to ' 34.50 per share as against ' 24.50 pershare for the year 2014-15.
The amount of dividend totaling to ' 1406.09 crores inclusive of ' 237.83 crores forCorporate Dividend Tax on distributed profits shall be dispensed from profit after taxfor the year.
INTERNAL RESOURCES GENERATION
The Internal Resources generated during the year were ' 5830.28 crores as compared to' 3901.05 crores in 2014-15 on standalone basis.
CONTRIBUTION TO EXCHEQUER
Your Corporation has contributed a sum of ' 52234.73 crores to the exchequer duringthe year by way of duties and taxes as compared to ' 40752.42 crores in 2014-15 onstandalone basis.
MEMORANDUM OF UNDERSTANDING (MOU) WITH GOVERNMENT OF INDIA
Your Corporation has been signing a Memorandum of Understanding (MOU) with the Ministryof Petroleum & Natural Gas. The performance of the Corporation of the year 2015-16qualifies for "Excellent" rating basis self-evaluation.
During the year 2015-16 Your refineries have recorded the best ever crude processingwith a combined refining throughput of 17.23 MMT ( 16.18 MMT in 2014-15) and capacityutilization of 116 %. This high performance could be achieved by optimal crude mix betterequipment reliability timely shutdown adherence and commendable operational discipline.
The Overall MoU Rating for Your refineries for Physical parameters like Crude thruputDistillate yields Energy Intensity Index stands at "Excellent" level.
Basic raw material for the refineries is crude oil which constitutes more than 90% ofthe expenses. Optimum crude mix therefore plays a vital role in refinery profitability.Major challenge before refineries is availability of right crude mix at right price ascrude oil market is predominantly seller driven. This demands continuous rebalancing ofcrude procurement dynamics. Sustained coordination by the corporation resulted in higherallocation of desirable grades from NOC. Quote validity period was reduced in spot tenderto bring in more competitiveness. HPCL is the first Indian Oil PSU to procure crude viaSTS (Ship to Ship Transfer). The aforesaid efforts could enable the corporation registerthe highest GRM amongst public sector oil marketing companies.
Higher crude processing translated into enhanced production of Petroleum Products withyour refineries recording best ever LPGMS HSD LOBS and Bitumen production of 82530326470 423 and 1195 TMT respectively.
In a continuous effort to upgrade the product quality Mumbai refinery has successfullycarried out revamp of existing DHDS and implemented the IsoTherming technology which isfirst of its kind in the country. With existing DHT and DIU units Mumbai refinery isequipped for complete conversion of HSD to BS IV specification which is well before theschedule of roadmap for BS IV fuel specification by April 2017. This project has alsoresulted in enhanced capacity improvement in energy efficiency along with more stringentproduct quality of HSD in the future.
As is evident energy costs contribute to the major chunk of the operating costs to therefineries. Therefore sustained efforts were made to reduce purchase power costs and inthat direction Mumbai refinery has purchased power by open access through group captivemode thereby reducing the cost of purchased power and consequently brought down theoverall refinery Opex. Mumbai refinery is the first amongst PSU refineries to implementthe scheme sourcing 20 MW power and upon smooth functioning it is planned to increase itfurther during the coming year.
Hydrogen management is the most essential for manufacture of better quality petroleumproducts especially in the light of recent demand for superior specifications of MS &HSD. Accordingly Pressure Swing Adsorption (PSA) facility for hydrogen purification fromCCR Net gases was commissioned at Visakh refinery during the period. PSA technology isoffered by few licensors and technology adopted by the facility was jointly developed byCorporate R&D and M/s GENS Korea. With the availability of pure Hydrogen from CCR theload on hydrogen generation units has reduced considerably resulting in improved energyefficiency and reduction in Opex.
Crude oil is an essential commodity and thus the government has taken steps to envisiona strategic cavern storage for emergencies by setting up Indian Strategic PetroleumReserve Ltd (ISPRL). The strategic crude cavern storage are being set up at threelocations Viz. Visakhapatnam Padur and Mangalore with over 5 MMT storage capacity. Thefacility at Vishakhapatnam has a storage capacity of 1.33 MMTPA made in two compartmentsCavern A has 1.03 MMT capacity meant for ISPRL and Cavern B of 0.3 MMT capacity allottedfor HPCL. Visakh refinery and ISPRL had jointly commissioned both Cavern A and B of Crudecavern facility. The first parcel received was Bonga crude oil in cavern B andsubsequently the facility is being utilized for regular refinery operations. This hasbrought flexibility in optimizing refinery tank farm for storing and processing differentcrudes at reduced landed costs.
Extending the commitment towards environmental protection your refineries have alwaysbeen a forerunner to implement initiatives for reduction of emissions Visakh refinery hassuccessfully commissioned Tail Gas Treating Unit (TGTU) in the Sulphur recovery Trains atDHDS thus achieving 99.9 % Sulphur recovery. The facility was adopted indigenous Tail GasTreating (TGT) technology offered by M/s Engineers India Limited (EIL). Mumbai refineryhas commissioned Flue gas scrubber unit (FGSU) at Old FCCU for reduction of SOx emissionsand Suspended Particulate Matter. These initiatives have reduced the SO2emission substantially thus contributing to much lower emissions than the stipulatedemission norms.
Your Corporation continues to leverage workplace Health Safety & Environment as anintegral part of its business policies. Refineries believe occupational and personalhealth of all employees at all manufacturing sites as well as at its offices is vital forexcellence in overall performance. Managing health and safety of the people who work forus both directly and indirectly continued to be our highest priority with special focusto enhance safety culture contractor safety management risk assessment and training.Thus Mumbai refinery has achieved best ever safety record since its inception with 15Million Safe Man Hours as of 25th March 2016 i.e. 1721 incident free days since 7/10/2011.
Your Corporation has a market share way ahead of refining capacity. With an aim tominimize this gap both the refineries have planned for capacity enhancement - MumbaiRefinery to 9.5 MMTPA and Visakh Refinery to 15 MMTPA. To keep pace with global standardsa number of high complexity secondary processing units including bottom upgradation andfuel quality improvement facilities have also been planned. Managing space for the projectwithin existing facilities has been a major challenge which is well addressed by intensivesite clearance activities through reorientation/removal of old assets. This willfacilitate to commence the project field activities immediately after Board approval/Environmental clearance.
Your Corporation is committed to cleaner auto fuel missive of Government of India inrolling out BS-IV compliant Diesel (HSD) and Petrol (MS) from April 12017. Necessarymodifications in Visakh refinery in this aspect would be completed way ahead of stipulateddate. Mumbai refinery has already inducted necessary infrastructural changes and iscapable of total BS-IV conversion now itself. As regard to compliance with BS-VI standardswhich is scheduled for rolling out effective April 1 2020 both the refineries havefirmed up action plans through revamp of existing units. Licensors selection for theseunits have already been completed and process design activities are now in progress.
Your Corporate R&D Centre has shown their exemplary performance by developing anddemonstrating commercially a number of process/product technologies in multifaceted areascovering Hydrogen purification from CCR off Gas Raffinate yield improvement CatalyticVisbreaking Effluent treatment Descaling of furnace tubes Pressure drop reduction inhydroprocessing reactors and Processing of heavy feed stocks in DHDS & FCC.
The particulars with respect to conservation of Energy Technology Absorption ForeignExchange Earning & Outgo are detailed in Annexure I.
The particulars relating to control of Pollution and other initiatives by Refineriesare listed in Annexure II.
Operating Performance of Refineries (Refinery-wise ):
* Specific Energy Consumption for the year is as per CHT New MBN method
The year 2015-16 saw Your Corporation seamlessly executing its strategic plans indifferent business lines initiating several customer centric programs and aggressivelypursuing its infrastructure development plans resulting in an impressive all-roundperformance.
Your Corporation continued its winning streak by recording its best ever physicalperformance during 2015-16 achieving sales volume (including exports) of 34.2 milliontonnes compared to sales of 31.95 million tonnes during 2014-15. In the Domestic salessegment your corporation recorded a growth of 9.3% over previous year volume and amongstpublic sector oil companies increased market share by 0.31% to reach a market share of21.25% as on 31st March 2016.
The Industry saw major growth in products of Motor Spirit LPG Fuel Oil Bitumen andLubricants. Your Corporation not only recorded Industry leading growth in these productlines but has also grown significantly in products of Consumer Diesel Naptha AviationFuel and the New Business line of RLNG which helped your corporation achieve a growthabove Industry.
In the motor fuel segment your Corporation achieved a sales volume of 22.74 MillionTonnes and increased its market share in MS and HSD (combined) by 0.37%. The focus onstrategic network expansion saw commissioning of a total 590 new retail outlets during2015-16 which include 185 retail outlets to cater to customers in rural areas thusfurther extended our reach and touch points with customers in retail segment to a total of13802 Retail Outlets.
Your Corporation has particularly focussed on providing citizen friendly services tocustomers of domestic LPG and also engaged them on different accounts through increasedcoverage across the country while pursuing some path breaking initiatives like PAHAL(DBTL) e- Sahaj etc. initiated by Govt. of India. We have further expanded coverage ofcitizens with environment supportive domestic LPG to meet their fuelling needs at home forcooking etc. through enrolment of 50.82 Lakhs new LPG Gas (Domestic) customers during FY15-16. Accordingly we now touch the lives of 524 lakhs of our citizens by meeting theirfuelling needs at home through supplies of domestic LPG totalling to 5.07 million tonnesduring the financial year ended 31st March 2016.
More than 27.17 Lakhs consumers of domestic LPG have been inspired to play their partin the cause of nation building and encouraged to give up LPG Subsidy by subscribing to"#GiveItUp" campaign by Govt of India. Our focussed attention to increase thereach of environment supportive Domestic LPG has resulted in 13.38 Lakhs BPL familiesreceiving the benefits envisaged as part of 'Give back scheme' as of March 31st 2016.
Your corporation continues to be the leading player in a crucial segment of ourbusiness which is not only very competitive but contributes significantly towards ourprofitability i.e. marketing of lubricants. Your corporation has created a new benchmarkof performance in this very important line of business which has a significant bearing onprofitability with a record total Lubes sales of 536 TMT during the year and thusretained its No. 1 position as a marketer of lubricants in our country for a third year insuccession.
In the Aviation Business Line your Corporation achieved a sales volume of 609 TMT andincreased its market share by 1.3% amongst PSU companies and is now supplying Jet Fuel toall the ten scheduled domestic airlines of the country.
Your corporation has also explored new business portfolios for a sustainableperformance on long term basis and accordingly we have taken very considered approach tobring our focus a new line of business for us i.e. marketing of RLNG and also achieved areasonable sales of 36.2 TMT through our initial efforts and operations in this segmentduring 2015-16.
Our focus on efficiency and reliability in operations of our O&D infrastructure hashelped us in delivering the highest ever throughput of 47.60 MMT through POLinstallations. Simultaneously we have also achieved an all-time high pipeline throughputof 17.61 MMT during the year.
Your corporation continues to capture the emerging trends in the market place as wellas continuously evolving preferences at customers' end and continues to address them byrepositioning itself and incorporation of various strategic initiatives and effectiveapplication of technology to engage customers in several innovative ways.
A detailed discussion of the performance of the Marketing function is given in theManagement Discussion & Analysis.
During the year 2015-16 the Corporation was able to bring down interest from ' 707crores to ' 640 crores because of efficient treasury management. The Corporation was ableto meet its day-to-day short term requirement of funds through mix of short terminstruments like Commercial Papers Collateralised Borrowing and Lending Obligations andRevolving Line of Credit in USD. The Corporation was able to invest temporary surpluses atoptimal rates deriving substantial income from such investments.
During the year Your Corporation obtained long term issuer rating of "Baa3"with positive outlook from M/s. Moody's Investors Services and the above rating is at parwith sovereign rating of India. With this Your Corporation has two international creditratings one from M/s. Fitch Rating and the other from M/s. Moody's Investors Services.
Leveraging Your Corporation's reputation and image in the international market YourCorporation was able to re-finance high cost ECB loan of US$ 465 million at significantlylower cost besides extending its maturity. The Corporation also funded its capex withforeign currency loan of US$ 250 million at very fine rates.
INTERNAL FINANCIAL CONTROLS
Your Corporation has adequate Internal Financial Controls for ensuring the orderly andefficient conduct of its business including adherence to the Corporation's policies; thesafeguarding of its assets; the prevention and detection of frauds and errors; theaccuracy and completeness of the accounting records; and the timely preparation orreliable information which is commensurate with the operation of the Corporation. As partof this exercise the design of internal controls and its operating effectiveness forthe key business processes is tested by independent experts. Based on the review carriedout independent experts have confirmed that they are satisfied with the effectiveness andadequacy of Internal Controls over Financial Reporting. The entire activity of review andassessment of Internal Controls is carried out under the guidance of a Core Committeeset-up for this purpose.
RISK MANAGEMENT POLICY
Your Corporation has adopted a well-defined process for managing its risks on anongoing basis and for conducting the business in a risk conscious manner. Theseself-regulatory processes and procedures are contained in our Risk Management Charter andPolicy 2007. The Corporation has a structured and comprehensive Risk Managementframework under which the risks are identified assessed monitored and reported as apart of normal business practice. Your Corporation has leveraged technology to seamlesslyintegrate and automate the entire process of risk monitoring and reporting which alsofacilitate company-wide process of managing the risks. Our risk management system is fullyaligned with the corporate and operational objectives.
The Corporation has engaged the services of an independent expert to assist incontinued implementation of effective Risk Management framework. In that direction RiskManagement Steering Committee (RMSC) continues to provide its guidance. Your Corporationhas put in place mechanism to inform Board Members about the risk assessment andminimization procedures and periodical review to ensure that executive managementcontrols risks by means of a properly defined framework.
During the year based on the theme of Preventive Vigilance as a tool of GoodGovernance surprise inspections CTE-type inspections interactions with the employeesincluding new recruits and other stakeholders were conducted. Coordination with agencieslike CBI CVC Vigilance wing of MOP&NG etc. was done apart from carrying outinvestigation of complaints received from offices of MOP&NG CVC CBI and othersources.
Review of operating areas for system improvements such as the Retail outlet Propertymanagement Credit Policy Management implementation of CSR program process of reverseauction etc. was also carried out during the year.
The year witnessed harmonious & productive Employee Relations across theCorporation as an outcome of proactive Industrial Relation practices. Our continued thruston resolving issues through continuous dialogue and maintaining a collaborative approachwith Unions workmen and other stake holders resulted in significant productivityenhancement. Various Settlements were signed with Unions in the areas of Productivity& process improvement effective Redeployment etc. which amply demonstrates thehealthy Industrial Relations climate in the Corporation.
As part of Organization's Capability building initiative and to develop second line ofUnion Leadership in the Unions in view of the retirement of some union leaders trainingprogramme titled n*T mM mM" (Together We Win) was conducted during the year.
Further HP Connect Workshops were held during the year for sharing Corporation'sStrategy & future growth plans various Compensation benefit schemes and HR Policiesfor Union office bearers Gaurav Award Winners etc. to enable them to become HR Championsat locations. The Corporation launched Gyanjyoti Programme for Computer Literacy ofworkmen in which all labour category employees have been covered.
Contract Labours were covered under the Prime Minister's Jan Dhan Yojana and wages arebeing disbursed through e-payment.
Your Corporation was conferred with the "EFI National Awards for Excellence inEmployee Relations for the year 2015 "(Pan India Category) at a ceremony held duringthe EFI National HRM Summit - 2015 on December 9 - 10 2015 at Mumbai.
Your Corporation was also awarded with "Global HR Excellence Award forOrganization with Best Employee Relation Practices" at a ceremony held during the24th edition of World HRD Congress on February 15 2016 at Mumbai.
OFFICIAL LANGUAGE IMPLEMENTATION
Office Language Implementation (OLI) has been given the utmost importance in theCorporation. Hindi is used as official Language with the spirit of persuasion andmotivation and ensuring the statutory compliances pertaining to Official LanguageImplementation. Hindi is also used in Information technology with the use of latesttechniques.
Use of Hindi is encouraged among the employees through All India Hindi MahotsavOfficial Language conferences competitions and workshops. Your Corporation continues toHead the Town Official Language Implementation Committee (TOLIC) in Mumbai for GovernmentUndertakings/Corporations since its formation in 1983.
Your corporation is having prominent position in Oil Sector for Official LanguageImplementation by winning 27 awards including 'Rajbhasha Shield' from MOP&NG from lasttwo years.
CORPORATE SOCIAL RESPONSIBILITY
Your Corporation constantly strives to be a model of excellence in all its endeavour beit in business prosperity or in environmental and societal stewardship. Social Developmentthrough business operations and CSR intervention always remains at the core of leadershipdecisions. In order to achieve these goals Your Corporation has taken dynamic CSRactivities and touched thousands of lives in the year 2015-16 across the length andbreadth of the country. Efforts were made to ensure that benefits of the CSR activitiesreaches to the less privileged and marginalized sections of society under the focus areasof Child Care Education Health Care Skill Development Sports Environment andCommunity Development.
The Major Projects of CSR are in sync with National Developmental Policies andSustainable Development Goals and focuses on education health care and skill developmentin a holistic manner. Our Projects Nanhi Kali Unnati and Akshaya Patra strive tomeaningfully contribute to uplift the educational standards of communities. Project NanhiKali attempts to educate first generation girl children by providing Social Academic andmaterial support. Your Corporation under Project Akshaya Patra supplemented thegovernment effort in providing hot and nutritious meals to school children so that thestudents maintain good health and motivation to attend schools. IT based computereducation was provided to students under Project Unnati which not only boosted theirinterest for being in schools but also opened wide horizons for them in life. YourCorporation has taken up Project Dhanwantari to provide free door step health care to themarginalized community located in difficult areas through Mobile Medical Vans (MMV).Project Suraksha addressed the burning issue of HIV/AIDS among the vulnerable sections ofsociety the long distance trucker through free medical consultation counselling andoutreach services. Through Project Dil without Bill free heart surgery was undertaken foreconomically underprivileged giving new lease of life. The Corporation attempted to createan inclusive society taking Project ADAPT which has provided sophisticated and state ofthe art therapies special education and skill development to differently abled students.With aim of providing livelihood opportunity to youth Project Swavalamban was takenduring the year which contributed to Skilled India by training drop out youths in variousskills and achieving employment for trained youths.
Your Corporation has enthusiastically participated in 'Swachh Bharat Abhiyan'. A largenumber of stakeholders were engaged with aim to make India clean. Activities wereconducted at business locations for generating awareness and sensitize employees and otherstakeholders. Shram Daan projects cleanliness drive walkathons competitions communitymeeting etc. were organized. Under Swachh Vidyalaya Abhiyan Your Corporation completedthe construction of 1245 school toilets majority of which are in states of AndhraPradesh Assam Bihar Chhattisgarh and Odisha. Your Corporation has also taken up theinitiative for the maintenance of these toilets by collaborating with state governments.
A number of initiatives were taken for the development of communities close to ourBusiness Units in a Pan India manner. Activities were taken in all focus areas withspecial emphasis on activities related to Swachh Bharat Abhiyan. A number of communitytoilets were constructed during the year dustbins and waste bins were provided communitydrains were constructed etc. National Cleanliness drive was undertaken between September25th and October 31st all over the country where stake holders from all sectionsparticipated. Activities were taken to strengthen the institutions supporting weakersections of society like orphanages old age homes. Under Community Development focusarea drinking water and water for livelihood remained at the focus. Schools were providedwith drinking water facility and water harvesting activities were taken for the remoterural and tribal areas. CSR Month was celebrated to generate awareness on social issuesamong stakeholders and to ensure the cooperation of all stakeholders in development ofsociety. Your Corporation innovated CSR practices by developing entrepreneurs from SC/STcommunities and provided them end to end training for being an independent entrepreneur.Highest ever scholarships to the students from SC/ST/ OBC and PWD were given. As animportant initiative sports were promoted among talented youth at various locations.
Your corporation has used a holistic development model with a goal to empower allsections of society. An utmost concern was given to 10 Principles of UN Global Compact andthese were followed in letter and spirit by all level of employees. In future we aim toinnovate and expand our reach to the neediest of the person and we shall attempt thatthose living close to our business units are healthy happy and educated.
The details of CSR activities of the corporation containing details of CSR CommitteeMembers brief outline of the CSR policy overview of the CSR initiatives prescribedexpenditure amount spent etc. forming part of Director's report are provided in AnnexureIII.
The Composition of CSR committee is as under
line Committee had approved the CSR policy and the Budget. The CSR policy is uploadedon Corporation's website weblink of which is given herein below:
Weblink to CSR Policy - http://www.hindustanpetroleum.com/csrpolicy
Weblink to Projects and Programs -
Your Corporation continues to adopt the best practices of Corporate Governance toensure transparency integrity and accountability in its functioning. The corporateGovernance Report highlighting these endeavours has been incorporated as a separatesection forming part of the Annual Report.
PROCUREMENT OF GOODS & SERVICES FROM MSES
In line with the Public Procurement Policy for Micro & Small Enterprises (MSEs)Order 2012 for the year 2015-16 against the set target of 20% Your Corporation hasachieved 25.36% ( ' 1646.60 crores) procurement of goods & services from Micro &Small Enterprises and a target of 20% has been set for the year 2016-17.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 ('Act') and Rules made thereunder your Corporationhas constituted Internal Complaints Committees (ICC). During the year One (1) complaintwas received by the Corporation enquiry of which is under process. Further YourCorporation has conducted one workshop and also developed Online Portal for all employeesto create awareness. During the year 512 officers have completed online awarenessprogramme named 'Prevention of Sexual Harassment'.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A detailed Management Discussion and Analysis Report forms part of this Annual Report.
FINANCIAL STATEMENTS OF SUBSIDIARIES
In terms of Proviso to Section 136 (1) of the Companies Act 2013 Company will placeseparate audited accounts in respect of each of its Subsidiary on its website & alsoprovide a copy of separate audited financial statement in respect of each of itsSubsidiary to any shareholder of the company who asks for it. The Financial Statements ofthe Subsidiary companies will also be kept open for inspection at the registered office ofthe Company and that of the respective Subsidiary companies.
Pursuant to provisions of Section 129(3) of the Companies Act 2013 a separatestatement containing salient features of the Financial Statement ofSubsidiary/Associate/Joint Venture Companies in Form AOC-1 is attached along withFinancial Statements.
The Cost Audit for the financial year 2014-15 was carried out and the Cost AuditReports were filed with the Ministry of Corporate Affairs before the stipulated date offiling.
Your Corporation's Board presently comprises of 8 Directors. The Whole Time Directorsare Shri Mukesh Kumar Surana (Chairman & Managing Director) Shri Pushp Kumar Joshi(Director - Human Resources) Shri B.K. Namdeo (Director- Refineries) Shri Y.K. Gawali(Director - Marketing) and Shri J. Ramaswamy (Director - Finance).
Shri J Ramaswamy is also appointed as Chief Financial Officer (CFO) of the Corporationin terms of requirement of Section 203 of the Companies Act 2013.
The Government Directors are Ms. Urvashi Sadhwani and Shri Sandeep Poundrik. The PartTime Non Official Director (Independent) is Shri Ram Niwas Jain.
As per the provisions of Section 152 of the Companies Act Shri Pushp Kumar Joshi &Shri Y.K. Gawali retire by rotation at the ensuing Annual General Meeting and beingeligible offer themselves for re-appointment.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNEDDURING THE
Shri Mukesh Kumar Surana Chairman & Managing Director of the Corporationwas appointed on the Board of Your Corporation effective 01.04.2016.
Shri J. Ramaswamy Director Finance (Whole Time Director) was appointed asAdditional Director on the Board of Your Corporation effective 01.10.2015. He is alsoappointed as Chief Financial Officer (CFO) of the Corporation.
Ms. Urvashi Sadhwani Sr. Advisor Ministry of Petroleum & Natural Gas and aGovernment Director was appointed as Additional Director on the Board of YourCorporation effective 04.01.2016.
Shri Ram Niwas Jain Part-Time Non Official Director was appointed asAdditional Director on the Board of Your Corporation effective 20.11.2015.
Shri Anant Kumar Singh was appointed as Part time Ex-Officio Director on theBoard of Your Corporation effective 30.09.2015.
Ms. Nishi Vasudeva Chairman & Managing Director has ceased to be Directorof the Corporation effective 31.03.2016 on attaining the age of superannuation.
Shri K.V. Rao Director Finance has ceased to be Director of the Corporationeffective 30.09.2015 on attaining the age of superannuation.
Shri Anant Kumar Singh Part-Time Ex-Officio Director has ceased to be Directorof the Corporation effective 03.01.2016.
Dr. Gitesh K. Shah Part-Time Non Official Director (Independent) has ceased tobe Director of the Corporation effective 25.02.2016 on completion of tenure.
The Board places on its record sincere appreciation for the valuable services renderedby the above Directors during their tenure as Directors of the Corporation.
NUMBER OF MEETINGS OF THE BOARD
During the year 8 (Eight) Board meetings were convened and held. The details of theBoard Meetings are given in Corporate
MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES
Your Corporation being a Govt. Company is exempted to furnish information underSection 197 of companies Act 2013 vide
Ministry of Corporate Affairs (MCA) Notification dated 05/06/2015.
The details regarding the number of women employees vis-a-vis the total number ofemployees in each group is also given as herein below:
*Your Corporation has no posts classified under group 'B' as the entry innon-management grades has been re-classified in group 'C' effective 1.1.1994.
PERFORMANCE EVALUATION OF BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Your Corporation being a Government Company the Performance Evaluation of the Companyis carried by the Administrative Ministry i.e. Ministry of Petroleum and Natural Gas(MOP&NG) through the process of Memorandum of Understanding in each Financial Year. Asper MCA Notification dated 5th June 2015 provisions of Section 134 (3) (p)shall not apply in case the Directors are evaluated by the Ministry which isadministratively in charge of the company.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent directors have given declaration that they meet the criteria ofindependence as laid down under Section 149(6) of Companies Act 2013 and SEBI (ListingObligations & Disclosure Requirements ) Regulations 2015. Statement of declarationrequired under Section 149(6) have been obtained from the Independent Directors.
POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION
Your Corporation being a Government Company is exempted to furnish information underSection 134 (3) (e) of the Companies Act 2013 vide MCA Notification dated 05.06.2015.
POLICY FOR REMUNERATION OF KEY MANAGERIAL PERSON AND OTHER EMPLOYEE
Your Corporation being a Government Company the remuneration payable to KeyManagerial Persons and other employees are fixed by the Government of India. Howeverpayment like Performance Related Pay is placed for the approval of Nomination andRemuneration Committee.
The composition of Audit committee as required under section 177(8) of the CompaniesAct 2013 is given as under:
During the year there were no such cases observed where the Board had not accepted anyrecommendation of the Audit Committee.
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Company hasappointed Shri Upendra Shukla Practising Company Secretary to undertake the SecretarialAudit of the Company. The Report of the Secretarial Audit is annexed herewith as AnnexureIV. There is no qualification reservation or adverse remark made by the PractisingCompany Secretary in his Secretarial Audit Report.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act 2013 read with rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of Annual Return isannexed as Annexure V.
RELATED PARTY TRANSACTIONS
The details of transactions entered into with the Related Parties during the year2015-16 are enclosed as Annexure VI. PERFORMANCE AND FINANCIAL POSITION OFSUBSIDIARIES ASSOCIATES AND JOINT VENTURES
The details on the performance and financial position of Subsidiary Associate andJoint Venture Companies are given in Management Discussion & Analysis Report. Furtherpursuant to Section 129(3) of the Companies Act 2013 read with Rule (5) of the Companies(Accounts) Rules 2014 the salient features of Financial Statement of Subsidiary andJoint Ventures in Form AOC-1 forms part of the Annual Report separately.
COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURES ORASSOCIATE
There are no companies which have become or ceased to be our Subsidiary joint ventureor associate during the year.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the Financial Year 2015-16 there is no Order or Direction of any Court orTribunal or Regulator which either affects Corporation's status as a going concern orwhich substantially or significantly affects corporation's business operations:
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Corporation being a Government Company is subjected to the CVC Guidelines and theCorporation has a separate Vigilance Department administering the Vigilance matters.
Your Corporation has a Whistle Blower Policy approved by the Board and the same isplaced on the website of the Corporation. Weblink of whistle blower policy is statedherein below:-
DETAIL OF DEPOSITS
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 it is hereby confirmed that:
i. In the preparation of the Annual Accounts the applicable Accounting standards hadbeen followed along with proper explanation relating to material departures.
ii. The Directors had selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the Financial Year and theprofit and loss of the company for that period.
iii. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
iv. The Directors had prepared the Annual Accounts on a going concern basis.
v. The Directors had laid down internal financial controls to be followed by thecompany and that such Internal Financial Controls are adequate and are operatingeffectively.
vi. The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
The Directors gratefully acknowledge the valuable guidance and support extended by theGovernment of India Ministry of Petroleum and Natural Gas other Ministries PetroleumPlanning & Analysis Cell and the State Governments.
The Directors also acknowledge the contribution made by the large number of dealers anddistributors spread all over the country towards improving the service to our valuedcustomers as well as for the overall performance of the Corporation.
The employees of the Corporation have continued to display their total commitmenttowards the pursuit of excellence. Your Directors take this opportunity to place on recordtheir appreciation for the valuable contribution made by the employees and look forward totheir services with zeal and dedication in the years ahead to enable the Corporation toscale even greater heights.
Your Directors are thankful to the shareholders for their faith and continued supportin the endeavors of the Corporation.